A different kind of merger

This refers to ‘Will RBI approve LVB, Indiabulls Housing merger?’ (April 8). The proposed amalgamation of Lakshmi Vilas Bank (LVB) with Indiabulls Housing Finance (IBH) is quite different from the mergers witnessed recently. In the cases involving mergers of Gruh Finance with Bandhan Bank, CapitalFirst with IDFC Bank and Bhararat Financial Inclusion with IndusInd Bank, the banker had more assets, was the dominant partner and the other partner was a microfinance institution.

Here, the NBFC is four to five times the size of the bank and has significant exposure to corporates as long term mortgage loans. From day one, CRR and SLR aggregating 22 per cent have to be maintained by the amalgamated entity. Though both of them are classified as liquid assets, in view of regulatory prescription, they will not be available for meeting maturing liabilities in the same way as liquid assets are available to IBH now. Meeting priority sector targets, as a commercial bank, will also be a challenge due to the minuscule loan size of LVB, in which the priority sector portfolio might at best be not be more than ₹10,000 crore.

Coimbatore

‘Are unconditional cash transfers desirable?’ (April 8) raises valid questions about the efficacy of the Congress’ NYAY scheme. Chances of unintended use such as spending on drinking or paying interest on debt incurred cannot be ruled out. Both are very common among the poor. Moreover, as soon as a poor household reaches the celling of ₹12,000, there may be a tendency to remain there so as not to lose the benefit of ₹6,000 per month, unless of course the household income jumps beyond ₹18,000 per month to cover the gap. The household may withdraw from MGNREGA or other small jobs to “keep” the income close to ₹12,000 level. Transferring the benefit to a woman of the family may not ensure wise expenditure given the grip of the male member in the family.

Pune

The editorial ‘Looming water scarcity’ (April 8) is timely. It has rightly focussed on the agriculture sector given that it accounts for about 80 per cent of all freshwater usage. In the urban setting too, things are far from satisfactory. There is little to show in terms of rainwater harvesting and other conservation measures. Water wastage in our cities continues unabated be it washing of cars or watering of gardens. Even households in upper class enclaves are not prudent with water use.

Full individual house metering, dual pipe installation in new buildings and stringent fines/penalties for wastage/theft must be implemented. We must scale down norms for urban usage from 140 litres per capita per day to 90-100 litres (five buckets). which is quite sufficient.

Pune

This is with reference to the news report ‘Muslims should not waste their votes on Congress’ (April 8). How long will our politicians fight elections on the basis of caste and religion. The leaders of major political parties should realise that the youth of the nation will be a major deciding factor in election outcomes in future. Hence, the focus of any leader/party should be to promise a good future for the youth. The youth of today are aspiring for good education, medical facilities and employment opportunities.

Thane

With the seven-phase Lok Sabha polls nearing, there seems to be a discernible spike in no-holds-barred personal attacks by political leaders against their opponents. Rather than seeking mandate on the strength of having fulfilled its poll promises made in the 2014 Lok Sabha polls, the BJP has found it convenient to rake up divisive issues and make muscular nationalism as its main plank. For the Congress-led Opposition, unseating Modi is top priority. That the development narrative took a back seat in the present election campaign evokes deep concern.

Sholavandan, TN

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